How to Automate Your Bookkeeping and Credit Upkeep in 2018

by | BiggerPockets.com

This details the first part of a series of automation projects we did in 2017 for our buy-and-hold real estate business. This post will help you with your bookkeeping and organizing loans and lines of credit using Tiller HQ and Google Sheets.  

Bookkeeping

As much as I love to outsource, bookkeeping is one of the few tasks I’ve held on to. It forces me to look at our income and expenses on a monthly basis. This benefit has barely outweighed my dislike for doing it.

I’ve attempted to use QuickBooks unsuccessfully and have resorted to using Quicken Rental Property Manager for the past several years. I’ve always preferred the customization of a spreadsheet. Unfortunately, I hadn’t found a good solution to automatically bring transactions to the sheet and categorize and tag them with minimal ongoing effort.

That is, until I stumbled upon Tiller!

Related: 7 Intuitive Tech Tools to Streamline Your Wholesaling Business

About Tiller

It’s an inexpensive tool ($5 per month) that will automatically download your transactions—banking , credit cards, lines of credit, etc.—daily into a Google Sheet that can be shared with anyone you’d like. You can then customize the tabs based on your needs. I have pivot tables set up to show expenses by month and property, and I have income from our property management software Appfolio automatically added into the sheet each month.

I had a script built that categorizes (e.g. “repairs,” “utilities,” “property taxes,” etc.) and tags each transaction by property based on its description. I may do a video in the future if there’s some interest in it. You can also check out AutoCat, recently built by Tiller, which will auto categorize based on your preferences. It’s prettier than mine, but it doesn’t automatically tag by property just yet.

It will take some time to get set up, but it’s well worth it. The amount of time I spend bookkeeping has consistently decreased each month as I’m adding new transactions to the pattern matching (so that the script will match the category in the future and potentially the tag). I no longer dread this task!

Checks are the one block of payments that I haven’t figured out how to automate. I had a script developed that downloads the check images from our bank and saves them into a specified Google Drive folder. This saves me from looking up each check online on my bank’s website. Ultimately, it would be great to take it one step further.  

Related: The #1 Thing You Need to Automate Your Wholesale Business

Organizing Loans and Lines of Credit

We’ve manually updated loans and lines of credit in the past as we think about it in a spreadsheet. For instance, if we take $5,000 off a line of credit, we may or may not update this. The current principal balances of our loans would be inaccurate in our spreadsheet, as we weren’t updating them often enough.

The main thing I want to know is how much available credit we have at any time. I want to see this in one spreadsheet. I’ve set up another Tiller spreadsheet (separate from the bookkeeping one) that keeps track of balances and uses the “Import Range” function to constantly check for any updates to our lines of credit.

For loans, I’m able to see updated information for any loan, such as current principal balances, how much of our monthly payments are going to interest and principal, and our anticipated mortgage interest for a given year. They’re not 100 percent accurate, but they are fairly close.

Check out this video below and feel free to use my Google Spreadsheet (just make a copy) as a template for your own setup.

What tricks have you found to automate processes in your business?

Share them below!

About Author

Aaron Kinney

Aaron Kinney has been investing in mobile home and land properties since 2011. He writes about this occasionally at MobileHomeEbook.com and helps real estate businesses implement automation at SelahSoftware.com.

18 Comments

  1. Patrick Liska

    AARON,
    surprised you had problems with quicken, i TAG all my transactions by properties and even rooms for the property. in the end you just run a report based on the “TAG”, it’s easy to run a report for a property. I use both quicken and quickbooks ( for other companies ) but i love the ease of quicken rental property manager for my personal and properties( especially the calendar, that keeps my payments in order for me). any payments you make to a loan you can split between principal and interest and if you download all your banking, any money taken from a line of credit should show up. the only problem i have with quicken sometimes is it miss categorizes some downloads, even if you have had them in there before, so you have to check your downloads.

    • Aaron Kinney

      Hey Patrick,

      You’re right about Quicken Rental Property Manager. I got to the point where I was looking for a couple things with my bookkeeping that Quicken’s rental property manager couldn’t do:

      1. Cloud-based: Much easier to outsource if it’s cloud-based and is easier to share reports when other owners have access to this info whenever they want it. I’ve set up some custom integrations where my father and I see automated cash flow reports in Slack, which helps us keep a constant eye on what’s going on in our business.

      2. Automatic Categories and Tags: I had issues with Quicken RPM’s memorization feature too where it seemed to randomly forget categories it had assigned to transactions. It was never great and as we’ve added more and more homes, this became tedious. With our set up in Tiller, the pattern matching gets incrementally better every month as we add new types of transactions to it as they come up.

  2. Justin R.

    I’m all for anyone doing whatever works best for them, but pretty much the entire world does accounting a certain way and has figured these things out already … we should think twice about why that is.

    Personally, it was around my 6th rental when I made the switch to double entry accounting and QuickBooks Online. Haven’t looked back – best thing I’ve done from a process perspective. Double entry accounting is certainly an acquired skill, but it is WELL worth it to learn – besides being the global standard, QuickBooks Online (and similar software) does SO MUCH out of the box I didn’t know I wanted to automate. Lots of other benefits. Less than 4 units, I’d say use spreadsheets. Beyond that, just QB. At some point it makes sense to also put AppFolio or Yardi or whatever in the mix too, but that’s somewhere north of ~25 units. That’s my mileage. YMMV.

  3. jon posell

    You said that you have a script that grabs check images from your bank acct. This would be great for my business and personal acct.
    Can you share how you do this? I’m currently on a mac but have a PC on order. Thank you for a great article.

    • Aaron Kinney

      Hey Jon,

      You’re going to need someone with programming experience to help you set this up. If you email me at [email protected], I’d be happy to get you a quote.

      As soon as I published this article, my bank added captcha forms, which required a modification of the script. It’s now back up and running.

      If you hire someone from Fiverr or Upwork, for example, just make sure that you develop a good working relationship with them so that they can make adjustments to the script if the bank changes their website.

    • Aaron Kinney

      Hey Raymond,

      Yes, tons of time depending on how many transactions you have per month. I think Tiller has a free trial so you could always check it out and see if you like it. Feel free to email me at [email protected] if you want my bookkeeping script I mentioned in the above article or just want to talk more about it.

  4. Ashley Wilson

    Hi Aaron, I am looking for something to assist with expense tracking for our flipping business. Specifically, I am looking for a receipt tracking app that a few people can use to hopefully store/categorize my receipts. Have you come across anything like that?

    • Troy Purcell

      Hi Ashley. You might want to check out Xero. You can import all paperwork and store it against each line item. Or you can match it up with something like Receiptbank to make it even more streamlined. I use this for my long term holds as well as projects. It also has category tracking so that you can code to individual properties or projects.

    • Rhoan scarlett on

      Hi Chiagozie,

      Double entry accounting simply means for ever debit entry you have a corresponding credit entry to be in balance. So in other words you cannot have a one sided equation and be in balance.

      Thanks and best regards,
      Rhoan G Scarlett.

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